EVA - Please Help

Hi Friends,

EVA = NOPAT - (WACC * Total Captial)

Total capital = Book value of Debt + Book Value of Equity…

For total capital is it the Begining or Ending book value that we should use??? Cheers


Shootforthestars1, you are a bloody legend!!! I keep getting these bastards wrong - tears… Again much appreciated!!

For the MVA = Mkt value of the company (mkt value equity + mkt value debt) - Accounting book value (book value of debt + book value of equity), would I be right in saying we use end values??

yes, use the end values to calculate bv of debt and bv of equity. Keep in mind that for BV of debt you only take long term debt into account.

in case you’re interested, there’s a question on the schweser mock exam 3 am session on this stuff.

Brilliant! thanks aggybail, thanks for the heads up. I will take a look at schweser as well… Goodluck next Sat